dotDigital sales climb in second half of 2012

dotDigital Group, a software and digital marketing company, reported on Friday a 22 per cent sales increase during the last half of 2012 as new clients including BBC Worldwide and Balfour Beatty jumped on board.

Email marketing, e-commerce and website building services were the top performers, the group said in a trading update for the six months leading to the end of December.

A 38% increase to £4.1m in email marketing, including Saas licence and usage, was driven by new clients in the corporate sector and demand from existing customers.

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Clients who joined the company over the period were BBC Worldwide, e-Consultancy, Harveys, England Hockey Board, Investec, Osprey London, BP International, ITV, Odeon Cinemas, Ryman, Delice de France, Surrey County Council, City & Guilds, Cartridge World, Balfour Beatty and Help for Heroes.

The newly opened New York office also helped boost revenues as it signed its first email marketing client just before the Christmas holiday.

The company now plans to open an office in Melbourne, Australia.

While the sales were up overall, the company experienced a decline in services of search engine optimisation (SEO), pay per click and managed campaigns.

"Despite our efforts to reposition the search marketing business to mitigate the impact of the changes made by Google to their search engine algorithms in 2012, it has become clear in recent months that the original strategy of cross-selling SEO to the small and medium enterprises clients of dotMailer is now less attractive and less profitable because of reduced operating margins and is increasingly seen as a distraction to the core strategy of growing email marketing revenues," the company said in a statement.

However, that company said it has continued to see recurring revenues and is predicts growth this year.

The full results will be announced in February. Shares fell 6.72% to 15.62 at 9:50 Friday.

RD